TIDMOVG
RNS Number : 5045T
Ovoca Gold PLC
04 July 2018
THIS ANNOUNCEMENT CONTAINS INSIDE INFORMATION.
4 July 2018
Ovoca Gold plc
("Ovoca" or the "Company")
Proposed acquisition of up to 59.9 per cent. of IVIX
Change of name to Ovoca Bio plc
Admission of the Enlarged Group to trading on AIM and ESM
Notice of Extraordinary General Meeting
and
Notice of Annual General Meeting
Ovoca today announces that it has conditionally agreed, subject,
inter alia, to Shareholder approval at the EGM, to acquire up to
59.9 per cent. of IVIX LLC ("IVIX"). for a cash consideration
payment of up to approximately US$6.2 million, to be satisfied from
the existing cash resources of Ovoca (the "Transaction").
IVIX, a Russian-incorporated company, was formed in 2012 and
since that time has sought to develop and subsequently
commercialise a proprietary drug candidate, BP101 (known as
"Libicore"), for the treatment of female sexual dysfunctions.
Libicore is a novel synthetic peptide, administrated through a
nasal spray. Clinical studies completed to date have demonstrated
statistically significant efficacy in treatment of major forms of
female sexual dysfunction. To date, IVIX has completed Phase II
clinical studies in Russia for Libicore. It now intends to complete
the Russian Phase III clinical trial for Libicore in Q3 2019 and
expects to have the results available by Q2 2019, following which
it will seek approval for the marketing of Libicore in the Russian
market.
The acquisition of IVIX presents, in the opinion of the Existing
Directors, an attractive opportunity for the Company. The
development of a promising drug candidate, backed by strong
intellectual property, to target an attractive market segment is an
opportunity that, the Existing Directors believe, has the potential
to generate significant returns for Shareholders. The Enlarged
Group's goal is to become a leader in the development and
commercialisation of novel product candidates for the treatment of
female sexual dysfunctions.
The Transaction constitutes a reverse takeover under the AIM
Rules and the ESM Rules and thus completion of the Transaction is
conditional on, inter alia, the approval of Shareholders.
Shareholder approval will be sought at the EGM to be held at The
Radisson Blu St. Helen's Hotel, Stillorgan Road, Blackrock, Co.
Dublin, Ireland, at 12.30 p.m. (or, if later, as soon as
practicable after the Annual General Meeting shall have been
concluded or adjourned) on 27 July 2018. An Admission Document
containing details of the Enlarged Group and containing a notice of
the Extraordinary General Meeting will be posted to Shareholders
shortly and is available to view on the Company's website at
www.ovocagold.com.
The nature of the Company's business will be transformed by the
Transaction and, in order to reflect its new activities, it is
proposed to change the Company's name to Ovoca Bio plc. Following
Admission, the Enlarged Group will seek to dispose of its remaining
mining assets in an orderly fashion.
Kirill Golovanov, Yuri Radchenko and Leonid Skoptsov, being the
Existing Directors who hold Ordinary Shares, have given an
irrevocable undertaking to the Company to vote in favour of the
Resolutions (and to procure that such action is taken by the
relevant registered holders) in respect of their beneficial
holdings totalling 42,818,609 Ordinary Shares, representing
approximately 52.5 per cent. of the Issued Share Capital of the
Company.
Kirill Golovanov, Chief Executive of Ovoca, commented:
"I am pleased to announce to Shareholders that we have agreed to
acquire a majority interest in IVIX. The Board believes that the
proposed acquisition of IVIX represents an exciting opportunity to
utilise Ovoca's balance sheet strength to accelerate the next stage
of development of IVIX's product candidate, Libicore, and to
potentially generate substantial future returns for our
Shareholders through the commercialisation of the product in what
is an attractive market segment."
This summary should be read in conjunction with the full text of
this announcement and the Admission Document, which is being posted
to Shareholders shortly. Defined terms within this announcement
have the same meanings as those within the Admission Document.
Annual General Meeting
In conjunction with the mailing of the Admission Document and
Notice of EGM, the Company will also shortly post the notice of
Annual General Meeting ("AGM") to Shareholders. The AGM is convened
to be held on 27 July 2018 at The Radisson Blu St. Helen's Hotel,
Stillorgan Road, Blackrock, Co. Dublin, Ireland at 12.00 p.m. The
notice of Annual General Meeting is also available to view on the
Company's website at www.ovocagold.com.
For further information:
Ovoca Gold plc www.ovocagold.com
Kirill Golovanov (Chief Executive) Tel +7 495 916 6029
Davy (Nomad and ESM Adviser)
John Frain / Daragh O'Reilly Tel +353 (0)1 679 6363
EXPECTED TIMETABLE OF PRINCIPAL EVENTS
Publication of the Admission Document 4 July 2018
Latest time and date for receipt of Forms of Proxy for the Extraordinary General 12.30 p.m. on 25 July 2018
Meeting
Extraordinary General Meeting 12.30 p.m. on 27 July 2018(i)
Expected time and date of cancellation of trading on AIM and ESM of the Existing 7.00 a.m. on 30 July 2018
Ordinary
Shares
Expected time and date of Admission and commencement of dealings in the Enlarged Group 8.00a.m. on 30 July 2018
on
AIM and ESM
--------------------------------------------------------------------------------------- -----------------------------
(i) Or if later, as soon as practicable after the Annual General
Meeting convened for 12.00 p.m. on the same date and at the same
place, shall have been concluded or adjourned.
Note: Each of the dates in the above timetable (other than the
date of publication of the Admission Document) may be adjusted by
Ovoca in consultation with Davy. Any such change will be notified
by an announcement on a Regulatory Information Service. All times
are Dublin times unless otherwise stated.
FURTHER DETAILS OF THE TRANSACTION
1. INTRODUCTION
In 2014 Ovoca suspended mining operations at its Stakhanovsky
Licenced Area, located in Magadan in eastern Russia and, in the
interim period, has considered its strategic options in relation to
the licence and its gold exploration and mining activities more
generally. The decision to halt further development of the
Stakhanovsky Licenced Area followed a period of continued
volatility in the gold markets which resulted in the Existing
Directors re-assessing the commercial viability of proceeding with
the development of the project.
Following the suspension of the Company's mining operations, the
Existing Directors have been assessing possible options to most
effectively use the Company's strong balance sheet in order to
create value for its Shareholders.
In recent months, Ovoca has engaged with IVIX, a Russian company
developing a drug candidate for the treatment of female sexual
dysfunctions. Following satisfactory progression of these
discussions, the Board has today announced that Silverstar, a
subsidiary of the Company, has entered into the Transaction, which
is a conditional transaction to acquire up to 59.9 per cent of the
participation interests (shares) in the charter capital of IVIX for
a cash consideration of up to (approximately) US$6.2 million
(EUR5.3 million), to be satisfied from the existing cash resources
of Ovoca.
Under the terms of the Transaction, Silverstar will acquire,
subject to Shareholder approval, approximately 50.02 per cent of
the participation interests (shares) in the charter capital of IVIX
for an aggregate cash consideration of US$4.12 million (EUR3.54
million). Following completion of such acquisition, Silverstar also
has the right to acquire a further newly issued participation
interest to be issued by IVIX for US$2.04 million (EUR1.75 million)
which would increase its overall participation interest
(shareholding) in the charter capital of IVIX by 9.9 per cent,
following which it would hold approximately 59.9 per cent of all
participation interests in the charter capital of IVIX.
IVIX was incorporated in 2012 and since that time has sought to
develop and subsequently commercialise a proprietary drug
candidate, BP101 (known as Libicore), for the treatment of female
sexual dysfunctions. Since incorporation, IVIX has received funds
totalling approximately EUR6.0 million to finance the development
of Libicore and for working capital purposes. To date, IVIX has
completed Phase II clinical trials in Russia for Libicore. It now
intends to complete the Russian Phase III clinical trial for
Libicore in Q3 2019 and expects to have the results available by Q2
2019, following which it will seek approval for the marketing of
Libicore in the Russian market. IVIX has also initiated discussions
with the FDA for the potential approval of Libicore development
dossier for the US market.
On completion of the Transaction, the senior management team of
IVIX will be integrated into the Enlarged Group. The existing Chief
Executive Officer of Ovoca, Kirill Golovanov, will serve as Chief
Executive Officer of the Enlarged Group, with Dmitry Golikov
continuing in his role as managing director of IVIX.
The nature of the Company's business will be transformed by the
Transaction and, in order to reflect its new activities, it is
proposed to change the Company's name to Ovoca Bio plc. Following
Admission, the Enlarged Group will seek to dispose of its remaining
mining assets. The Enlarged Group will also continue to hold
1,405,000 ordinary shares in Polymetal. The Enlarged Group may
elect to sell some or all of its holding of such shares in order to
fund its future working capital requirements.
The acquisition of the participation interests in IVIX presents,
in the opinion of the Existing Directors, an attractive opportunity
for the Company. The development of a promising drug candidate,
backed by strong intellectual property, to target an attractive
market segment is an opportunity that, the Existing Directors
believe, has the potential to generate significant returns for
Shareholders.
The Transaction constitutes a reverse takeover under the AIM
Rules and ESM Rules, requiring the approval of a majority of all of
the Shareholders entitled to vote at a general meeting. An
Extraordinary General Meeting to approve the Resolutions has been
convened to be held at The Radisson Blu St. Helen's Hotel,
Stillorgan Road, Blackrock, Co. Dublin, Ireland at 12.30 p.m. (or,
if later, as soon as practicable after the Annual General Meeting
shall have been concluded or adjourned) on 27 July 2018, notice of
which is set out at the end of the Admission Document.
The Company has received irrevocable undertakings to vote in
favour of the Resolutions to be proposed at the Extraordinary
General Meeting in respect of 42,818,609 Ordinary Shares,
representing approximately 52.5 per cent. of the Issued Share
Capital.
2. INFORMATION ON IVIX
Background and history
IVIX was incorporated in 2012 to develop and subsequently
commercialize a promising drug candidate, BP101, for the treatment
of female sexual dysfunctions.
Between 2012 and 2015 IVIX completed a preclinical pharmacology
program for BP101, the results of which allowed IVIX to then
proceed and initiate a first-in-human clinical study in early
2015.
In 2017 IVIX completed a Phase IIa proof-of-concept clinical
study in 110 female patients with hypoactive sexual desire disorder
(HSDD). The statistically and clinically significant results from
that study demonstrated impressive efficacy and favourable safety
profile in the target indication. To date, three clinical studies
of BP101 have been completed, demonstrating BP101's promising
potential for the treatment of female sexual dysfunctions,
including decreased desire and arousal disorders, as well as the
drug's safety for use.
These results have formed the basis for the upcoming Phase III
confirmatory therapeutic clinical study in Russia. The Phase III
clinical study will be undertaken with the intention of obtaining
marketing authorization in Russia and Eurasian Economic Union (EEU)
countries for Libicore. This step will be crucial for market access
in and further commercialization of the BP101 in Russia and EEU
countries.
In March 2016, IVIX had a pre-investigative new drug (IND)
filing meeting with US Food and Drug Administration (FDA), where
BP101 scientific and clinical data was discussed. Generally, the
FDA positively assessed the data submitted by IVIX, but the Agency
requested additional preclinical and clinical studies to confirm
the safety of the drug and to study its toxic-kinetic profile.
Additional Phase I clinical trial and toxic-kinetic research has
been completed. Other preclinical studies will be completed in
2018.
The results of the BP101 development program are
patent-protected by three patents in Russia and one in the USA with
a validity period up to 2033. Additional patents are in national
landing phases in key target pharmaceutical markets: Brazil,
Canada, China, EU, Israel, India, South Korea, and Japan.
Since incorporation, IVIX has received funds totalling
approximately EUR6.0 million to finance the development of Libicore
and for working capital purposes. Prior to the proposed
Transaction, Bioprocess Capital Ventures (through its trust manager
Bioprocess Capital Partners LLC) owns 64.6 per cent of IVIX's
issued share capital, with the founders of IVIX (through Bio Peptid
LLC) holding 35.4 per cent.
As at 31 December 2017, IVIX had total assets of approximately
EUR1.25 million and had a net loss of EUR0.8 million for the
financial year ended 31 December 2017.
Product candidate overview
The product candidate of IVIX - Libicore - is a novel synthetic
peptide, administrated through a nasal spray. The nasal spray
delivers the drug to olfactory and trigeminal nerves in the nasal
cavity where the drug accumulates in the olfactory bulb and then
further in the brain. Clinical studies completed to date have
demonstrated statistically significant efficacy in treatment of
major forms of female sexual dysfunction. To demonstrate Libicore's
applicability in clinic, IVIX has conducted three clinical trials
to date. Two Phase I clinical trials were conducted to estimate the
drug's safety and tolerability.
In a preclinical animal model, BP101 demonstrated statistically
significant enhancement of sexual behaviour in rats with decreased
libido due to low hormonal levels. The model consisted of rats with
surgically removed ovaries, the main source of sex hormones. The
rats were then injected with low doses of oestrogen and
progesterone at five days interval to reproduce the natural
oestrous cycle. In this model, the sexual activity of female rats
directly depends on the level of sex hormones. BP101 was delivered
intranasally to the rats injected with these minimal doses of
hormones. Their behaviour was then compared to rats injected with a
maximal (saturating) dose of sex hormones. To measure sexual
behaviour, the females were then introduced to active males. Two
parameters were measured - "proceptive" (courting) behaviour of
females and "lordosis" - reflexive posture leading to arching of
the back and raising of the head, facilitating copulation with
males. The results of this test demonstrated that BP101
consistently enhanced the sexual behaviour of female rats. With a
single dose, BP101 enhanced behaviour stronger than the saturating
dose of sex hormones (high progesterone).
In an exploratory Phase IIa proof-of concept randomized,
double-blind, placebo-controlled study in female patients with lack
or loss of sexual desire, 110 premenopausal women were treated with
either 2,54 mg of BP101 or a placebo in a 1:1 ratio. The drug
administration regiment included daily intranasal puffs for 4 weeks
with a subsequent off-treatment follow-up period for control of
sustainability of the treatment effect and long-term safety. Study
endpoints included change in different aspects of sexual
relationship (measured via Female Sexual Function Index ("FSFI"(1)
)) and distress related with the lack of desire (measured via
Female Sexual Distress Scale-revised ("FSDR-R"(2) )), and also
change in numbers of satisfying sexual events (SSEs) and number of
orgasms (with an orgasm as a component of SSE), compared with
baseline. The study demonstrated that treatment with BP101
significantly increased sexual desire and the number of SSEs and
orgasms in premenopausal women compared with the placebo.
Safety data from all BP101 clinical trials showed a favourable
safety profile and only mild-to-moderate adverse events related to
the treatment, with slightly more prevalence of mild local
irritation in the nose (route of administration), headache and
irritability. There was no increase of safety problems on high
doses of BP101, as well as no unacceptable adverse effects.
The drug is produced by contract manufacturing organisations
(CMOs). IVIX does not have and does not intend to develop its own
manufacturing facilities until significant revenues from sales are
achieved. For drug manufacturing, IVIX has chosen CMOs with strong
track records of quality assurance and regulatory compliance. In
Russia, the drug is manufactured by Nativa LLC, a CMO which has
numerous peptide drugs in its portfolio that have been successfully
produced for the Russian market.
For the USA and EU clinical studies, two CMOs have been engaged
to manufacture the drug. The active pharmaceutical ingredient,
peptide BP101, is to be manufactured by Bachem AG. Bachem is one of
the world's leading independent manufacturers of peptide active
pharmaceutical ingredients (APIs) and an established manufacturer
of small molecule APIs. Each year, Bachem manufactures hundreds of
batches of drug substance for projects in clinical trials and for
products on the market. Bachem's manufacturing facilities are
located in Switzerland and the United States and are regularly
inspected by the FDA and local authorities.
Juniper Pharma Services, located in Nottingham, UK, will fulfil
the second part of the drug manufacturing cycle for IVIX, namely
production of the final drug product. Juniper Pharma Services have
strong experience in the manufacturing of ready dosage forms for
clinical trials, under a Medicines and Healthcare Products
Regulatory Agency (MHRA) license.
The glass vials and nasal spray pump for the drug product are
manufactured by SGD (France) and Aptar (Germany) respectively, both
established firms in their respective areas with strong track
records of product quality assurance.
Intellectual property
In conjunction with its patent attorney, Troutman Sanders LLP,
IVIX has sought to manage its patent portfolio, prepare patent
filings and prosecute its patents in accordance with its overall
commercial strategy.
To date IVIX has been granted 4 patents; one in the USA and
three in Russia as follows:
Country Filed Serial no. Issued Patent no.
-------------- ----------- ---------- ---------- ----------
Russia 03.28.2012 2012111965 02.20.2014 2507212
-------------- ----------- ---------- ---------- ----------
Russia 04.01.2016 2016112342 07.21.2017 2626002
-------------- ----------- ---------- ---------- ----------
Russia 04.01.2016 2016112341 05.29.2018 2655763
-------------- ----------- ---------- ---------- ----------
United States 09.25.2014 14/338,080 08.09.2016 9,409,947
-------------- ----------- ---------- ---------- ----------
IVIX is prosecuting its main patent (Russian patent no.
2507212), covering a list of active pharmaceutical ingredients, in
nine more countries. The countries and corresponding application
numbers are outlined below:
Country Filed Serial no.
------------- ----------- ---------------
Brazil 05.28.2013 BR1120140238880
------------- ----------- ---------------
India 05.28.2013 8984/DELNP/2014
------------- ----------- ---------------
China 05.28.2013 201380028491.4
------------- ----------- ---------------
Japan 05.28.2013 2015-503152
------------- ----------- ---------------
European PCT 05.28.2013 13772776.4
------------- ----------- ---------------
Canada 05.28.2013 2,868,820
------------- ----------- ---------------
Israel 05.28.2013 234753
------------- ----------- ---------------
South Korea 05.28.2013 10-2014-7030301
------------- ----------- ---------------
Japan 05.28.2013 2018-030815
------------- ----------- ---------------
IVIX is working with Troutman Sanders LLP (and their local
colleagues in other jurisdictions) to pursue these patent
applications but there can be no guarantee that a patent will be
granted on foot of such applications.
IVIX also has exclusive rights to the invention "Stimulator of
Genital, Sexual and Reproductive Function" under patent No. 2404793
registered in Russia, under an exclusive licence obtained from Bio
Peptid LLC, an outgoing member of IVIX that is transferring its
shareholding to Ovoca pursuant to the Sale and Purchase
Agreement.
Market environment
Female sexual dysfunction ("FSD") is estimated to affect a
significant portion of the female population in US and EU
countries. Examples of FSD may include hypoactive sexual desire
disorder ("HSDD") and female sexual arousal disorder ("FSAD"). FSD
prevalence has been assessed in a number of large population
studies. In a research paper published by Berman, J.R. et al,(3)
FSD was estimated to be present in 30-50 per cent. of US women.
According to the Women's International Study of Health and
Sexuality, the prevalence of HSDD ranged from 6-13 per cent. in
Europe, and the proportion of women with low desire associated with
distress was significantly higher in younger women in comparison
with older women(4) .
Current treatment options
Current FSD treatment options mostly include non-specific
treatment focused on addressing any identified underlying
conditions or medication issues that are suspected of contributing
to FSD. However, in many cases FSD is idiopathic - i.e. not caused
by any other concomitant health or environment problems. In such
cases, treatment strategies include patient education,
psychotherapy and sexual therapy. Lifestyle changes such as stress
management and sleep adjustments are also recommended.
Specific medical treatments in FSD patients are limited to
various food supplements with unclear efficacy, and off-label
hormonal and antidepressant therapy. There is currently one
approved specific medical treatment - Addyi (flibanserin), produced
by Sprout Pharmaceuticals.
Hormonal treatment options include topical (i.e. in transdermal
patches, gels etc.) testosterone or estrogen therapies used
off-label. A number of clinical trials in HSDD patients, mostly
with testosterone-containing drugs, have taken place in recent
years. The only hormonal treatment marketed for HSDD was the
P&G drug Intrinsa, which was approved by the European Medicines
Agency (EMA) for the treatment of HSDD in women who have had an
oophorectomy (the surgical removal of an ovary or ovaries) and
receiving hormone replacement therapy. Intrinsa was withdrawn from
the EU market in 2010 due to commercial reasons. The safety profile
of Intrinsa was typical for testosterone-containing drugs and
included the following common side effects (seen in more than 1
patient in 10): hirsutism (increased hair growth, especially on the
chin and upper lip) and reactions at the site of application of the
patch (redness and itching).
Other off-label treatment approaches include the prescription of
antidepressant medications, such as atypical antidepressant
bupropion (Wellbutrin). This approach is more common in secondary
HSDD due to selective serotonin reuptake inhibitors (SSRIs) intake.
Bupropion, as well as other antidepressants, are not approved by
the FDA and EMA for treatment of female sexual dysfunctions, and
there is lack of evidence regarding their effectiveness. Side
effects of antidepressant medications vary, depending on the
individual mechanism of action and the individual characteristics
of each drug, but common side effects include nausea, insomnia,
dizziness, pharyngitis, abdominal pain, agitation, anxiety, tremor,
palpitation, sweating, tinnitus, myalgia, anorexia, urinary
frequency, rash, and nervousness.
Only one pharmaceutical treatment, Addyi (flibanserin,
antidepressant with selective action at serotonin 5-HT receptors),
is marketed in the US for HSDD. Flibanserin efficacy in large
US-based clinical studies was statistically significant over
placebo, but demonstrated concomitant safety problems, such as risk
of severe hypotension and syncope when taken together with alcohol
or even Addyi alone, or Central Nervous System (CNS) depression
(e.g., somnolence, sedation) with Addyi alone. Other common side
effects included dizziness, somnolence, nausea, fatigue, insomnia,
and dry mouth. In October 2015, Valeant Pharmaceticals acquired
Sprout Pharmaceuticals, the producer of Addyi, for an aggregate
purchase price of $1.45 billion, which included cash plus
contingent consideration. Subsequently, in December 2017, Valeant
completed the sale of Sprout to a buyer affiliated with certain
former shareholders of Sprout, in exchange for a 6% royalty on
global sales of Addyi beginning June 2019. Valeant noted that the
sale of Sprout provided it with the opportunity to divest a
business that was not core to its objectives, while also allowing
it to resolve an ongoing legal matter between it and former
shareholders of Sprout relating to compliance with certain
contractual terms of the 2015 acquisition agreement with respect to
the use of certain diligent efforts by Valeant to develop and
commercialize Addyi.
3. INFORMATION ON OVOCA
Ovoca Gold plc is a gold exploration and mine development
company focused on gold and silver deposits located in Russia.
Background and History
Ovoca was founded in 1985 in Ireland and since inception has
been involved in natural resource development. Ovoca entered Russia
in 2004 with the acquisition of Norplat Limited, a company
operating in the Murmansk Region which owned the licenses for the
Pellapakh molybdenum-copper-gold ore body and the Oleninskoye gold
ore body.
In 2006, Ovoca acquired a majority interest in OAO Ajax, a
Russian company that owned the Goltsovoye silver deposit in the
Magadan region in eastern Russian. Goltsovoye was, at the time, a
large, high grade silver deposit that had yet to be mined. Ovoca
carried out confirmatory drilling to verify historical Soviet data,
established a JORC Code resource, completed a feasibility study and
secured project financing to build a mine. The global economic
crisis which began in 2008 coincided with the financing, which was
later withdrawn. As such, in January 2009 Ovoca agreed to sell
Goltsovoye to Polymetal for an aggregate cash and share
consideration of US$47.7 million.
In January 2010, Ovoca purchased 100% of the
Nevsko-Pestrinskoye, Stakhanovsky and Rassoshinskaya gold
exploration and development projects located in the Magadan region
of Russia. Ovoca initially focussed the majority of its exploration
activities on Olcha in the southern section of the Rassoshinskaya
licence area, which was better developed in terms of geology.
Following exploration activities undertaken in 2010 and 2011 and
the resulting increase in the resource base of Olcha, Ovoca was
granted a certificate of discovery in October 2011. In April 2012,
Ovoca was then granted a 25 year exploitation license for Olcha,
the final regulatory step required before exploitation of Olcha
could commence. The next steps for Ovoca to exploit Olcha would be
the development of mining operations which would require additional
capital investment from the Company and the fulfilment of certain
obligations under the terms of the Olcha exploitation licence.
Ovoca announced on December 2012 that it had entered into a
conditional agreement to sell its 100 per cent. interest in its
subsidiary Olymp, whose only asset was the mining and exploration
license for the Olcha gold-silver deposit, to Polymetal. The
consideration payable under the disposal was 775,000 Polymetal
ordinary shares.
Ovoca subsequently focussed its efforts on the Stakhanovsky
Licence. A resource estimate for Stakhanovsky, based on the
sampling information available as at the end of 2012, was prepared
by MIR Resources Limited in accordance with the JORC Code, and
identified a total mineral resource of 4.4 Mt at an average gold
grade of 2.3 g/t for an estimated gold content of 231,000 ounces in
the Measured and Indicated resource category and 96,000 ounces in
the Inferred resource category.
In 2014, after taking into account the continued volatility in
the gold markets and the risks associated with the development of
mining operations on the Stakhanovsky Licence, which would require
additional capital investment from the Company and the fulfilment
of certain obligations under the terms of the Stakhanovsky Licence,
the Company suspended exploration activities on the area and
initiated efforts to seek a joint venture partner to develop the
licence or to potentially sell the Company's interest in the
licence. The Company has so far been unable to find a joint venture
partner or an acquirer for the Stakhanovsky Licence.
The Company currently has no plans to develop the Stakhanovsky
Licenced Area and, in the first half of 2017, the Company disposed
of its mining equipment at the site.
Ovoca is a strongly capitalized business. As at 31 December
2017, the Company had net assets of EUR22.4 million, which included
cash and cash equivalents of EUR5.5 million and available for sale
financial assets of EUR15.9 million. Ovoca has no current
outstanding debt. In recent years, Ovoca's share price has
continued to trade at what the Existing Directors believe to be a
significant discount to its net asset value per Ordinary Share. At
31 December 2017, such discount was approximately 68 per cent.
Current trading and prospects
Since 31 December 2017, Ovoca has traded in line with management
expectations. Mining and exploration operations remain suspended at
the Company's licence areas in Russia. Ovoca intends to dispose of
its remaining mining property and equipment, primarily comprising
the mining site office in Magadan, in 2018. On 12 March 2018,
Polymetal declared a final dividend for its 2017 financial year of
US$0.30 per ordinary share, pursuant to which Ovoca received
dividend income of approximately US$0.25 million on 25 May 2018
relating to its holding of 1,405,000 ordinary shares of
Polymetal.
During the remainder of 2018, the Company will continue to
rigorously pursue all available legal options to recover amounts
due to it pursuant to the loans previously extended to Taymura LLC,
including the pursuit of the personal guarantees which were used to
secure the loan. However, there can be no guarantee that the entire
loan amount will be recovered by Ovoca.
4. STRATEGY OF THE ENLARGED GROUP
The Enlarged Group's goal is to become a leader in the
development and commercialisation of novel product candidates for
the treatment of female sexual dysfunctions. The key elements of
this strategy include:
Complete the clinical development of the Enlarged Group's
product candidates to approval
The Enlarged Group is focused on completing the development of
its clinical product candidate, Libicore. The Enlarged Group
intends to complete the Russian Phase III clinical trial for
Libicore in Q3 2019 and expects to have the results available by Q2
2019. Subject to the results of the Phase III trial, the Enlarged
Group intends to submit applications for marketing approval for
Libicore within Russia and Eurasian Economic Union countries in Q3
2019. The costs of completing the Russian Phase III clinical trial
for Libicore are estimated to be US$3.5 million and will be capable
of being satisfied from the cash resources of IVIX following the
completion of the investment by Ovoca.
In the United States, IVIX has had a pre-IND meeting with the
FDA to discuss requirements for conducting clinical trials in the
United States in order to obtain marketing authorization. The
Company received instructions from the FDA on the studies that will
need to be conducted to obtain authorization to conduct a Phase IIb
clinical trial in United States. The Enlarged Group intends to
fulfil the FDA's requirements and to progress the clinical trials
of Libicore in order to ultimately obtain marketing authorisation
for Libicore from the FDA. Submission of the IND application to the
FDA and obtaining approval for the Phase IIb clinical trial is
expected to take place in 2019.
Establish commercialisation partnerships with third parties
The Enlarged Group intends to license commercialisation rights
or collaborate with regional partners, global pharmaceutical
companies or other qualified potential partners with the aim of
promoting its current and future product candidates in an effective
way with a targeted sales and marketing group.
Continue to invest in and strengthen its intellectual property
portfolio
On Admission, the Enlarged Group will own a patent portfolio
that provides broad effective protection of its technology and
current product candidate. The Enlarged Group intends to continue
to leverage this patent portfolio to develop and commercialise its
product candidate and potential future product candidates. The
Enlarged Group intends to continue to generate and file new patent
applications and take other steps to expand and strengthen its
intellectual property position. In addition, the Enlarged Group may
also expand its intellectual property portfolio through
in-licensing and acquisition.
5. PRINCIPAL TERMS OF THE TRANSACTION
The Company today announced that Silverstar has entered into the
Transaction, which is a conditional transaction to acquire up to
59.9 per cent of the participation interests (shares) in the
charter capital of IVIX for a cash consideration of up to
(approximately) US$6.2 million (EUR5.3 million), to be satisfied
from the existing cash resources of Ovoca.
Pursuant to the terms of the shareholders' agreement between
Ovoca, IVIX and the other members of IVIX ("Participation
Agreement"), Silverstar will acquire a newly issued participation
interest representing approximately 22.6 per cent of the charter
capital of IVIX for a cash consideration of US$1.86 million
(EUR1.60 million). Pursuant to the terms of the sale and purchase
agreement between Bio Peptid LLC, a current member of IVIX, and
Ovoca ("Sale and Purchase Agreement"), Silverstar will then acquire
an existing participation interest in IVIX from Bio Peptid LLC
representing approximately 27.5% of IVIX's charter capital, for a
cash consideration of US$2.26 million (EUR1.94 million). Following
these two steps, Silverstar will own 50.02 per cent of all
participation interests in the charter capital of IVIX which will
become a subsidiary of the Enlarged Group.
Following such acquisitions, Ovoca also has the right to acquire
a further participation interest to be issued by IVIX for US$2.04
million (EUR1.75 million) which would increase its overall
participation interest (shareholding) in the charter capital of
IVIX by 9.9 per cent. Should Ovoca exercise the option, it will
hold an approximately 59.9 per cent interest in the charter capital
of IVIX.
The Transaction is conditional, inter alia, on the passing of
the Resolutions, Admission and all of the conditions under the Sale
and Purchase Agreement and the Participation Agreement being
satisfied other than Admission.
6. EXISTING DIRECTORS AND PROPOSED DIRECTORS
The Board of Ovoca is currently comprised of Mikhail Mogutov as
Executive Chairman, Kirill Golovanov as Chief Executive Officer,
and Kenneth Kuchling, Yuri Radchenko, Donald Schissel, Leonid
Skoptsov and Timothy McCutcheon as Non-executive Directors.
The following changes, each of which will take effect from
Admission, will be made to the Board in connection with the
Transaction:
-- Romulo Colindres, Nikolay Myasoedov and Christopher Wiltshire
will be appointed as Non-Executive Directors;
-- Donald Schissel and Kenneth Kuchling will resign as Directors.
The biographical details of the Directors of the Enlarged Group
upon Admission are set out below:
Mikhail Mogutov (aged 61) - Proposed Executive Chairman
Mr. Mogutov joined the board of Ovoca in June 2006 and became
Chairman in 2008. Mr Mogutov qualified as an Engineer-Physicist in
1979 from the Moscow physics-chemistry institute and in 1984 was
awarded a PhD from the Institute of Molecular Genetics specialising
in Molecular Biology. Mr Mogutov has led a number of businesses
across a range of sectors including life science, chemical, heavy
industries, financial services and natural resources. Mr Mogutov's
recent experience in the life science sector including acting as
chairman for Biomed-Mecnikov, a biotechnology company focused on
the production of biopharmaceutical medicines based on recombinant
proteins and Pharmapark, a biotechnology company focused on
developing, manufacturing and promoting biopharmaceuticals in
Russia. In 2006 Mr Mogutov founded Bioprocess Capital Partners LLP,
a trust manager of the Bioprocess Capital Ventures which is focused
on investing in innovative biotech projects. Mr Mogutov is fluent
in Russian and English.
Kirill Golovanov (aged 40) - Proposed Chief Executive
Officer
Mr. Golovanov joined Ovoca as a corporate advisor in 2007 and
moved to be the manager of the Company's Russia representative
office in 2009. He was appointed as Chief Executive Officer of
Ovoca in May 2012. During his time at Ovoca he played a major role
in the development and subsequent sale of the Goltsovoye silver
deposit and the Olcha gold deposit. He has extensive experience in
the development of venture businesses in Russia, as well as working
experience at leading Russian enterprises, such as Gazprombank and
Vneshekonombank. Mr. Golovanov holds a JD, Moscow State Law
Academy, Moscow, Russia and an MBA from Duke University's Fuqua
School of Business, NC, USA. Mr Golovanov is fluent in Russian and
English. He also holds a Russian qualification certificate
corresponding to the position of a head, or a controller, or a
specialist in an organisation which carries out securities
management and manage investment funds, unit investment funds and
non-governmental pension funds.
Timothy McCutcheon (aged 45) - Proposed Non-Executive
Director
Mr. McCutcheon joined the board of Ovoca as a Non-Executive
Director in January 2009 and moved into the CEO position in
December 2009 before stepping down in April 2012 and becoming again
a Non-Executive Director. Prior to Ovoca, Mr. McCutcheon was a
partner at DBM Capital Partners, an investment manager and
corporate finance boutique specializing in natural resources. He
also worked at several investment banks such as Bear Stearns, Aton
Capital and Pioneer Investments as an award-winning equity analyst
and as an investment banker. Currently, Mr. McCutcheon is president
of Wealth Minerals Ltd, a TSX-V company developing lithium assets
for clean energy applications. He also provides management and
business development services to natural resource, technology and
aerospace firms. Mr. McCutcheon holds a BA, cum laude, from
Columbia College, New York and an MBA in Finance from Columbia
Business School. Mr. McCutcheon is fluent in English and
Russian.
Leonid Skoptsov (aged 63) - Proposed Non-Executive Director
Mr. Skoptsov joined the board of Ovoca in June 2006 and served
as the Company's chief executive officer from 2006 to 2009. Mr.
Skoptsov was part of the Bioprocess Group team that owned and ran
OAO "United Machinery Plants" (OMZ). He also played an active part
in natural resource development prior to Ovoca. He was the Chairman
of OAO Pervaya Gornorudnaya Companiya from 2001-2005, a zinc-lead
asset developer. He was also the Chairman of OAO Volganeft from
2000 to 2004, a mid-tier oil producer in Russia which was sold to
Russneft. He was part of the group that vended into Ovoca Gold plc
100% of OAO Ajax - Goltsovoye. Mr. Skoptsov holds a BA, cum laude,
from Moscow State University, Moscow, Russia. He is fluent in
Russian and English.
Yuri Radchenko (aged 65) - Proposed Non-Executive Director
Mr. Radchenko joined the board of Ovoca in June 2006. Mr.
Radchenko is a resident of the Magadan region in Russia and has a
long history of natural resource development in the region. He was
deeply involved in the development of the Julietta gold-silver mine
by Bema Gold Corporation and he is currently the Chairman of
Julietta's operating company. Additionally, he discovered the
Lunnoye silver deposit, which is now one of OAO Polymetal's core
assets. He was part of the group that vended into Ovoca Gold plc
100% of OAO Ajax - Goltsovoye. Mr. Radchenko holds a MS Geology,
from the Kazakhstan Polytechnical Institute, Almaty,
Kazakhstan.
Romulo Colindres (aged 47) - Proposed Non-Executive Director
Mr Colindres is an experienced medical practitioner and
pharmaceutical executive, having worked with GlaxoSmithKline plc
("GSK") in a number of senior roles since 2007. Mr Colindres is
currently Vice President, Global Medical Affairs Lead for Zoster
with GSK and has previously held roles with GSK in Panama, Brazil
and Belgium during his career with the company. Prior to joining
GSK, Mr Colindres was a physician in the United States and Brazil
and previously held roles in public health in the United States and
El Salvador. Mr Colindres holds an MBA from Duke University's Fuqua
School of Business, NC, USA, an MD from University of North
Carolina School of Medicine, Chapel Hill, NC, USA and a Masters of
Public Health from University of North Carolina School of Public
Health, Chapel Hill, NC, USA. He is fluent in Spanish and
English.
Nikolay Myasoyedov (aged 81) - Proposed Non-Executive
Director
Mr Myasoyedov is an expert in the field of bioorganic chemistry
and biotechnology. He is a full member of the Russian Academy of
Sciences since 2003, serving on the Department of Physical and
Chemical Biology. Mr Myasoyedov serves as Deputy Director for
Research and the head of the Department of Chemistry of
Physiologically Active Substances at the Institute of Molecular
Genetics. He has more than 1,000 citations on work published after
1975. He is a co-author over 360 scientific papers, including 2
monographs, more than 150 copyright certificates and patents, as
well as 4 foreign patents (USA, England, France, Sweden).
Christopher Wiltshire (aged 57) - Proposed Non-Executive
Director
Mr. Wiltshire is an experienced senior pharmaceutical and
biotechnology executive with over 20 years of international
experience. He currently serves as the CEO of Hematherix LLC, a
company he founded in 2015 to develop a first-in-class, early stage
recombinant blood protein. Between 2008 and 2015, he was the
founder/owner of IPT Bioconsulting, which provided strategic advice
to early and mid-stage biotechnology and pharmaceutical companies.
Mr Wiltshire previously served in number of senior positions with
Pfizer between 1998 and 2008, including as head of business
transactions and investments within The Pfizer Incubator LLC. Prior
to joining Pfizer, Mr Wiltshire worked with Eli Lilly and Company
between 1993 and 1998. Mr Wiltshire holds an MA in Engineering from
the University of Cambridge in the UK and an MBA from the Darden
Graduate School, University of Virginia, US.
7. CORPORATE GOVERNANCE AND BOARD COMMITTEES
Following Admission, given the commitment to good governance
practice, the Board intends to adhere to the QCA Corporate
Governance Code which sets out a standard of minimum best practice
for small and mid-sized quoted companies, particularly AIM
companies.
On Admission, the Board will comprise two executive Directors
and six non-executive Directors. The Board intends to meet
regularly (at least quarterly) to discharge its responsibility to
shareholders including to consider strategy, performance and the
framework of internal controls, as well as review its own
performance and composition.
The Enlarged Group will have the following committees on
Admission:
Audit committee
The Board has established an audit committee with formally
delegated duties and responsibilities. The audit committee will be
chaired with effect from Admission by Tim McCutcheon with Leonid
Skoptsov being the other member of the committee. The audit
committee will meet at least three times a year and will be
responsible for ensuring that the financial performance of the
Enlarged Group is properly reported on and monitored, including by
conducting reviews of the annual and interim accounts, results
announcements, internal control systems and procedures and
accounting policies.
Remuneration committee
The remuneration committee will be chaired with effect from
Admission by Mikhail Mogutov with Leonid Skoptsov being the other
member of the committee. It is expected to meet not less than two
times a year. Directors may attend meetings at the committee's
invitation.
The remuneration committee has responsibility for determining,
within agreed terms of reference, the Enlarged Group's policy on
the remuneration of senior executives and specific remuneration
packages for executive Directors, including pension rights and
compensation payments. It is also responsible for selecting
individuals to whom to make grants of awards under the Share Option
Scheme.
The remuneration of non-executive Directors is a matter for the
Board. No Director may be involved in any discussions as to their
own remuneration.
Nomination committee
The nomination committee will be chaired with effect from
Admission by Mikhail Mogutov with Tim McCutcheon being the other
member of the Committee. It is expected to meet not less than once
a year. The nomination committee will assist the Board in
discharging its responsibilities relating to the composition and
make-up of the Board and any committees of the Board. It will also
be responsible for periodically reviewing the Board's structure and
identifying potential candidates to be appointed as Directors or
committee members as the need may arise. The nomination committee
will be responsible for evaluating the balance of skills, knowledge
and experience and the size, structure and composition of the Board
and committees of the Board, retirements and appointments of
additional and replacement Directors and committee members and will
make appropriate recommendations to the Board on such matters.
8. CHANGE OF NAME
Subject to the Shareholders' approval by way of a special
resolution, it is proposed, pursuant to Resolution 2, that the name
of the Company be changed to Ovoca Bio plc subject to the approval
of the Registrar of Companies. If Resolution 2 to approve the
change of name of the Company is passed at the Extraordinary
General Meeting, the company's website address will be changed to
www.ovocabio.com as soon as possible. Resolution 2 is conditional
on Shareholder approval of the Transaction.
9. SHARE INCENTIVE SCHEMES
The Existing Directors and Proposed Directors believe that the
success of the Enlarged Group depends, in part, on the future
performance of the executive Directors and the senior management
team. The Existing Directors and Proposed Directors also recognise
the importance of ensuring that employees are incentivised and
identify closely with the success of the Enlarged Group.
The Company operates a share option plan which was adopted on 20
July 2009 and which gives employees, directors and consultants of
companies within the Group the opportunity to acquire shares in the
Company. The Remuneration Committee will consider a timetable for
proposed awards following Admission.
10. DIVID POLICY
The Proposed Directors' objective is to grow the Enlarged
Group's business. Future income generated by the Enlarged Group is
likely to be re invested to implement its growth strategy. In view
of this, it is unlikely that the Board will recommend a dividend in
the early years following Admission. However, the Board intends
that the Company will recommend or declare dividends at some future
date once they consider it commercially prudent for the Company to
do so, bearing in mind the financial position and resources
required for the Enlarged Group's development.
11. EXTRAORDINARY GENERAL MEETING
Set out at the end of the Admission Document is a notice
convening the Extraordinary General Meeting to be held at The
Radisson Blu St. Helen's Hotel, Stillorgan Road, Blackrock, Co.
Dublin, Ireland at 12.30 p.m. (or, if later, as soon as practicable
after the Annual General Meeting shall have been concluded or
adjourned) on 27 July 2018. The full terms of the Resolutions are
set out in that notice and are summarised below:
-- Resolution 1, which will be proposed as an ordinary
resolution, is to approve the Transaction for the purposes of Rule
14 of the AIM Rules for Companies and Rule 14 of the ESM Rules for
Companies;
-- Resolution 2, which will be proposed as a special resolution,
is to approve, subject to the passing of resolution 1, and the
approval of the Registrar of Companies, the change of the name of
the Company to Ovoca Bio plc;
-- Resolution 3, which will be proposed as a special resolution,
is to approve, subject to the passing of resolution 1, the change
of the main objects clause of the Company; and
-- Resolution 4, which will be proposed as a special resolution,
is to approve, subject to the passing of resolution 2, proposed
changes to the Memorandum and Articles of Association of the
Company.
12. IRREVOCABLE UNDERTAKINGS TO APPROVE THE PROPOSALS
Kirill Golovanov, Yuri Radchenko and Leonid Skoptsov, being the
Existing Directors who hold Ordinary Shares, have given an
irrevocable undertaking to the Company to vote in favour of the
Resolutions (and to procure that such action is taken by the
relevant registered holders) in respect of their beneficial
holdings totalling 42,818,609 Ordinary Shares, representing
approximately 52.5 per cent. of the Issued Share Capital.
13. ACTION TO BE TAKEN
Whether or not you intend to be present at the Extraordinary
General Meeting, Shareholders are asked to complete, sign and
return the form of proxy to the Registrars at Computershare
Investor Services (Ireland), Heron House, Corrig Road, Sandyford
Industrial Estate, Dublin 18 as soon as possible but in any event
so as to arrive no later than 12.30 p.m. on 25 July 2018. The
completion and return of a form of proxy will not preclude
Shareholders from attending the Extraordinary General Meeting and
voting in person should they wish to do so. Accordingly, whether or
not you intend to attend the Extraordinary General Meeting, you are
urged to complete and return the form of proxy as soon as
possible.
14. RECOMMENDATION
The Existing Directors consider the Transaction to be in the
best interests of the Company and the Shareholders as a whole.
Accordingly, the Existing Directors recommend that Shareholders
vote in favour of the Resolutions as they have irrevocably
undertaken to do so in respect of their own direct and beneficial
shareholdings being in aggregate 42,818,609 Ordinary Shares
representing approximately 52.5 per cent. of the Issued Share
Capital.
1 The FSFI is a questionnaire commonly used in the clinical and
scientific practice for assessment of sexual function in women. The
index enables to assess female sexual function taking into account
its six main components: sexual desire, sensitivity and
excitability, lubrication (vaginal moisture), orgasticity,
satisfaction with sexual life, coital and/or post-coital
discomfort/pain.
2 The FSDS-R is a validated questionnaire commonly used in the
clinical and scientific practice for assessment of a distress
related to a sexual function in women.
3 Berman J.R. et al, Female sexual dysfunction: incidence,
pathophysiology, evaluation, and treatment options, Urology, 54(3),
1999, pp385-391.
4 Nappi RE, Martini E, Terreno E, et al. Management of
hypoactive sexual desire disorder in women: current and emerging
therapies. International Journal of Women's Health. 2010;
2:167-175)
This information is provided by RNS, the news service of the
London Stock Exchange. RNS is approved by the Financial Conduct
Authority to act as a Primary Information Provider in the United
Kingdom. Terms and conditions relating to the use and distribution
of this information may apply. For further information, please
contact rns@lseg.com or visit www.rns.com.
END
ACQLLFFADDIVIIT
(END) Dow Jones Newswires
July 04, 2018 02:00 ET (06:00 GMT)
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